Kickstarter is an exciting place where you can find products that aren’t available on any other site. Except this isn't an alternative Amazon or ebay. No. While it looks as though you can buy a product in the same way, it's completely different.
Like Indegogo, Kickstarter is a crowdfunding website where innovators ask for money so they can build the products they are advertising. If you 'back' the project with your cash, it adds towards to goal, but even if the target amount is reached, you still may never receive the product, and we'll explain why.
On Kickstarter you’re an investor, not a customer
It doesn’t take long to find something on Kickstarter that catches the eye. At the time of writing we discovered a brand new reworking of the table-top Car Wars game by legendary designer Steve Jackson, an artbook consisting of over 100 photos taken by drones all over the world, and a comic book where a boy has to save his sister from a hospital filled with Nazis! Not bad at all.
Now, while these may all be tempting, it’s very important to take note of the pledge amount, the goal, and how many days or hours remain of the campaign. This is because all products listed on Kickstarter are in development. You’re not buying a finished product, at least not yet, instead you’re investing in the potential of it becoming a reality.
Hopeful creators put up the campaigns to get backing from interested consumers, then once the target has been reached, they begin production. While this is a great way for new and exciting products to come onto the market, it’s not without its risks.
In the past, purchasers (sorry, investors) have found the final products they received were disappointing due to changes in production that meant the different materials were used or the design was altered. That’s preferable to the scenario where some products are fully backed - the goal was met - but the products never materialised at all due to the company going into bankruptcy or encountering manufacturing issues.
The latter was the case with the famous ZANO drone that raised more the £2.3m ($3m) from backers. But the company couldn’t produce a fully working product before it fell into too much debt to continue. A handful of backers received their drones, albeit ones that couldn't fly, while the rest were left out of pocket with nothing to show for their investment.
In a recent article, The Guardian reported that ‘9% of projects failed to deliver rewards as promised’, which in business terms could be regarded as a success – after all that means 91% of new ventures make it to market – but if you’re thinking from the perspective of a standard consumer then a 1-in-10 chance that the item you order and pay for isn’t going to ever arrive can be something of a shock.
Even if the product does arrive, there’s a good chance that it will take much longer than you’re used to with Amazon. In these days of next-day delivery, having to wait months or in some cases years for something to turn up on your doorstep can be equally disappointing.
That may be ok if you're only spending a small amount and can afford to lose it, but probably not if you're keen to get the latest electric bike or anything else that costs a lot of money. In that case you may be better off buying from a company that is actually selling a product.
So, in short. If you’re backing a project on Kickstarter you need to bear in mind that there is a small chance you will never see anything for your money and a much larger probability of it taking far longer to arrive than you’d normally expect.
Can I get a refund if the product doesn’t arrive is delayed?
No. Kickstarter sees itself as a conduit between creators and potential customers, but nothing more. On the Kickstarter site it states explicitly, ‘Kickstarter does not issue refunds. Transactions are between backers and creators directly. To request a refund for a pledge, please contact the project creator.’
If you’re lucky then the creator may issue one, but the chances are if the product is delayed then there could be money problems that are causing the holdup.
One exclusion from this policy is if the project doesn’t actually reach its target by the end of the campaign. As no money is taken while a campaign is active, you won’t be charged if the pledged amount comes up short.
So, should I avoid Kickstarter?
Absolutely not. While there might be the occasional horror story, remember that over 90% of projects deliver their intended creations. It just requires a slightly different mindset to regular shopping. With Kickstarter you’re helping bring a new idea or product to life and one that wouldn’t have the chance to exist without your investment.
As with any form of gambling, even with odds as good as those on Kickstarter, just stick to the golden rule of never investing more than you can afford to lose.